Titan - The Outsourcing Journey
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ABOUT OUTSOURCING
Simply put, outsourcing means getting those things done outside that were
hitherto provided for internally. According to the Outsourcing Institute,
“Outsourcing is nothing less than a basic redefinition of the organization.
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Outsourcing suggests an organization focussed on a
few, well-chosen core competencies supported by long-term outside
relationships for many of its other activities and resources.” An
organization can outsource many functions of its day to day operations –
manufacturing, marketing, human resources management, information
technology services to name a few.
It is thus a type of make-or-buy decision, wherein typically an earlier
‘make'decision is altered to a ‘buy'decision. Earlier, when
competitive pressure on companies was not very severe, cost management
in manufacturing usually resulted in backward integration and gaining
ownership of a large range of manufacturing and subassembly facilities. |
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However, more and more organizations began moving towards
outsourcing manufacturing for a lot of reasons. Outsourcing helps a company
become flexible enough to terminate an operation if it does not meet the
business goals without being concerned about various human resources,
separation, or litigation issues.
It is not necessary to build a fixed overhead infrastructure and the company
can acquire and leverage customer acquisition expertise easily when it
outsources certain activities. As customers increasingly demand quick
delivery, companies have discovered the importance of optimizing the supply
chain activities. Moreover, with the markets changing rapidly, there has
been an increase in the investment risk in new technology, machinery and
other equipment.
This has necessitated flexible production systems in manufacturing concerns
throughout the world. Most importantly, organizations have also realized
that it is in the best interest of the company to concentrate its resources
on its core competencies only. The benefits of outsourcing can be summarized
as follows:
• Provides flexibility and versatility to in-house staff.
• Frees up capital and cash for other activities that are the company's core
competencies, such as R&D or marketing.
• Helps shorten the ‘time-to-market'by focussing on core activities.
• Provides access to industry leading process development expertise and
manufacturing technologies.
• Helps avoid long-term investments in potentially under-utilized production
capacity or excessive inventories.
THE ESSENTIALS OF OUTSOURCING
OUTSOURCING AT TITAN
TABLE V - TITAN - KEY STATISTICS
THE FUTURE
EXHIBIT I - TITAN - PRODUCT PROFILE
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